5 warhorse stocks you can use to ride through a narrow market

Analysts are bullish on these counters despite the ongoing choppiness in the market.

As analysts project the market to remain narrow until clarity emerges on the coronavirus pandemic, it makes sense to look at companies that have retained their positions among the top 10 Nifty constituents all these years.

PEER COMPANIES

Loading data...

PEER COMPANIES

Tried and tested business models that have stood through many storms on Dalal Street have delivered up to 1,260 per cent returns to investors in last 15 years.

As analysts project the market to remain narrow until clarity emerges on the coronavirus pandemic, it makes sense to look at companies that have retained their positions among the top 10 Nifty constituents all these years.

The list includes energy-to-telecom major Reliance Industries (RIL), IT majors Infosys and Tata Consultancy Services (TCS), private sector lender ICICI Bank and FMCG player ITC. Analysts are bullish on these counters despite the ongoing choppiness in the market.

With about 1,260 per cent rally since 2005, TCS stands out as top performer in the pack. It is followed by Reliance Industries (up 1,250 per cent), Infosys (up 420 per cent), ITC (up 400 per cent) and ICICI Bank (up 320 per cent).

The Reliance Industries stock has created a lot of buzz in recent weeks, as the company secured four back-to-back investments in less than four in its digital business Jio Platforms.

The company has also launched India’s biggest-ever right issue of Rs 53,125 crore, which opened for subscription on Wednesday.

The company allowed existing shareholders to pay only 25 per cent for subscribing to the issue, with the balance required to be paid in two installments in May and November next year. The company will offer one share for every 15 shares held at Rs 1,257 apiece.

Sanjeev Hota, head of research at Sharekhan, advised existing investors to opt for the rights issue with a 3-4 years investment horizon. He said new investors can buy RIL in a staggered manner over next 6-8 months.

The stock is down 4 per cent on a year-to-date basis, while the benchmark equity indices are down over 20 per cent for the same period.

TCS posted lower profits for March quarter at Rs 8,049 crore, but guided towards a very difficult time ahead which, it said, may even result in a ‘contraction’ in revenues in the first two quarters of FY21, as global clients fight the Covid-19 impact.

12 stocks that are showing 'BUY' signals on tech charts

of 13

Next

Prev

Play Slideshow

​Money-making ideas

18 May, 2020

Dalal Street gave a thumbs down to government's Rs 20 lakh crore stimulus package, saying it may fail to revive the economy in near-term. On Monday, stark warnings of an impending recession and the possibility of an escalation in trade tensions between the US and China kept market mood sombre.Amid uncertainty, analysts advise investors to adopt a stock-specific approach. "Traders and investors should refrain from chasing up-moves, if there is any and avoid creating any aggressive positions on either side. A cautious approach is advised for days ahead," said Milan Vaishnav, CMT, MSTA and founder of Gemstone Equity Research & Advisory Services.Based on various brokerage recommendations, here are a few stock ideas that analysts say can offer good returns over the next 3-4 weeks:

Next

BEL | BUY | Target Price: 77

18 May, 2020

This counter appears to have decoupled itself from the broader direction of the markets as it is displaying a better relative strength compared to major indices, the analyst said. Interestingly, it has not participated in the selloff witnessed las Thursday and on Friday it witnessed a sharp rise on the back of huge volumes, suggesting that a fresh leg of upswing is unfolding. Hence, positional traders can look to buy into this counter for a target price of Rs 77 with a stop below Rs 61 on a closing basis, he added.[Mazhar Mohammad, Chief Strategist – Technical Research, Chartviewindia.in]

Next

ITC | BUY | Target Price: Rs 184

18 May, 2020

This counter appears to have formed a short-term bottom around Rs 157 levels after retracing 62% of its last leg of the rally from the lows of Rs 138-193 levels. Hence, sustaining above Rs 157, it shall ideally head to test its interim top-placed around Rs 185 levels, the analyst said. Positional traders can buy into this counter and look for a target of Rs 184 with a stop below Rs 156 on closing basis.[Mazhar Mohammad, Chief Strategist – Technical Research, Chartviewindia.in]

Next

​BPCL | BUY | Target Price: Rs 357

18 May, 2020

A short term bottom appears to be in place around Rs 307 after the stock retraced around 50% of its last leg of the rally from the lows of Rs 252–375 levels. Moreover, strong move in the last session with relatively higher volumes is hinting that a pullback swing is in the offing, the analyst said. Hence, positional traders are advised to buy into this counter and look for a target of Rs 357. The stop loss suggested for the trade is close below 306.[Mazhar Mohammad, Chief Strategist – Technical Research, Chartviewindia.in]

Next

Emami | BUY | Target Price: Rs 214

18 May, 2020

The stock price was in a sustained downtrend over the last few weeks. Recently, it shifted to a consolidation pattern and formed an important swing low of Rs 169 levels on 11th May. Last week’s sharp upside bounce could now be considered as an upside breakout of few sessions range movement, the analyst said. This could also signal a possibility of important bottom formation at Rs 169-Rs 170 levels. The volume has improved during recent upside bounce in the stock price and momentum oscillator has started to show positive indication. The analyst said buying can be initiated in the stock and one can add more on dips down to Rs 183 and wait for an upside target of Rs 214 in the next 3-4 weeks. Stop loss for the trade is recommended at Rs 177.[Nagaraj Shetti, Technical Research Analyst, HDFC securities]

Next

Infosys reported a 6.3 per cent increase in consolidated net profit for March quarter, but refrained from providing any revenue guidance for FY21, citing uncertainty amid the pandemic.

“We are positive on Infosys and TCS amid a falling rupee. They also quality as defensives, which are now the flavour of the season,” said Ajit Mishra, VP Research at Religare Broking

“ITC is a free cash flow-generating machine. The growth factor is going to be there. It is hard to believe that a company with 10 per cent growth have just about less than 15 P/E multiple,” he said. Shares of the company are down 31 per cent on a year-to-date basis till May 18.

ICICI Bank reported a 6.91 per cent growth in March quarter profit at Rs 1,251 crore on a consolidated basis, after setting aside over Rs 2,000 crore towards provisions for the potential impact of the Covid-19 pandemic. Analysts said, the recent fall in ICICI Bank stock provides an opportunity to buy it for the long run. The scrip is down 45 per cent on a YTD basis.

Mishra said the ongoing selloff in financial counters may drag Nifty towards the 8,400 level. “However, I will be a buyer in ICICI Bank at Rs 270-280 level from a long-term perspective,” he said.

HDFC Securities is positive on ICICI Bank with a price target of Rs 442. “Covid-19 will impact growth and asset quality across the board. A robust balance sheet, improved underwriting practices and lower exposure to contextually vulnerable products will help ICICI Bank to emerge stronger,” the brokerage said in a May 10 report.